Hurricane Maria's Devastation Of Puerto Rico, 1 Year Later
MICHEL MARTIN, HOST:
As we mark one year since Hurricane Maria devastated Puerto Rico, the finger pointing continues in all directions. Many officials on the island blame the mass deaths and months without electricity on the federal government, which they say treats Puerto Ricans like second-class citizens. President Trump touted his response to the storm as fantastic. He disputed the report that found that nearly 3,000 excess deaths resulted from the storm.
But there's one thing that everybody can agree on, and it's that Puerto Rico had many problems before Maria hit. Months before the storm, the U.S. territory entered a financial restructuring - kind of like bankruptcy - and was put under a federal oversight board. The executive director of Puerto Rico's financial oversight and management board is Natalie Jaresko, and she is with us now.
Welcome thank you so much for joining us.
NATALIE JARESKO: Thank you for having me.
MARTIN: If you can, and as simply as you can possibly make it for the people who don't follow these issues closely, what are the main problems the board is tackling? What are the structural reforms? What are the kinds of things that you're most focused on?
JARESKO: There really are two mandates that the law has given the board. No. 1 is to put Puerto Rico back into the credit markets. We are in the midst of restructuring an enormous stack of debt that has been accumulated over decades here and is unaffordable given the lack of growth in the Puerto Rican economy over the last decade. The second mandate is to put the budget back into some type of fiscal order. We're mandated to have to try and reach balance four years in a row.
MARTIN: Ms. Jaresko, since it's been a year after the hurricane - as, of course, you know - I just wondered if your job has changed at all over the course of the year.
JARESKO: Yes. Our work changed over the course of the year. We had developed a series of fiscal plans and budgets prior to the hurricane that fit the situation prior to the hurricane. We had to basically start all over again after the hurricane, taking into account the very new and very difficult and complex realities. The needs of the people have changed. The priorities in government have changed.
But we also have the federal funding, which has changed what is possible. And so, as bad and as devastating as the hurricane is, it actually provides a certain silver lining to the people of Puerto Rico who, if used wisely, the federal funds, the insurance proceeds, could produce an island with 21st-century infrastructure if this process moves forward, as we all hope and pray it to move.
MARTIN: I don't think anybody knows better than you that you have taken it from all sides. I mean, you have. I mean, members of Congress want you to push for faster reforms. Bondholders say you want too much debt reduction. Local officials say the austerity measures that you are recommending just make it hard for people who are already living a precarious existence to function. And I'm just wondering, how do you try to incorporate all of that into the way you think about your job?
JARESKO: I try and listen to all of it. I try and meet with everyone who has an interest in moving Puerto Rico forward. In the end - I have to be frank with you - execution and implementation are the key to any of these reforms. You can write a plan, you can propose reforms. You can require, quote-unquote, certain budgetary changes. But everything depends on the executive branch implementing.
MARTIN: To that end, the governor, Ricardo Rossello, has said that the budget cuts that you want should come after pro-growth policies like infrastructure spending. Does it make more sense to focus on some sort of a stimulating activity before you ask for further austerity?
JARESKO: I think Puerto Rico needs to do this all at the same time, frankly. We do have the fiscal stimulus of the federal support, the federal aid that's coming in and will be coming in, it appears, over a 10-to-15-year period to rebuild the economy that was devastated by the horrible Hurricane Maria and Irma before that. So we have a stimulus coming from the federal government - not one that, you know, was planned and not one that, in a sense, is pleasant because - we wish just we never had the hurricanes in the first place. But that stimulus is in place. It actually provides a cushion of time.
Rather than wait - in my mind, you know, this gives us a cushion of growth in the economy, in jobs, in wages that enables us to make some difficult decisions on the fiscal side, improve government efficiency while that stimulus is in place. I think it would be much more complex and much more painful to wait until the stimulus is over and then start doing the reforms that are necessary. In the end, frankly, you know, it's an affordability issue. Puerto Rico does not have access today to credit markets, and it needs to balance its budget.
MARTIN: Who would you say is your main - I'm not sure what word to use - is it client? Is it constituency? I guess, who is your main priority in this?
JARESKO: It really is the people of Puerto Rico that are our main interest because the creditors have to care about the people of Puerto Rico. The people of Puerto Rico - we need them to stay on the island. We need them to be able to have a livelihood and economic activity that enables them to live their lives, raise their families here. And yes, then they become part of the tax base. But we have to have the confidence and the promise of an island where they can live their lives comfortably and economically viably. And to do that, you need a government that's efficient. You need a government that can afford the services that are necessary for the people.
MARTIN: You're a Ukrainian-American from Chicago who was recruited as Ukraine's finance minister after the collapse of the pro-Russian regime in 2014. You've been credited with stabilizing the finances of a country that had been plagued by a number of ills, including corruption. It may sound melodramatic to some, but I just wonder if there's anything about that experience that informs what you're doing now.
JARESKO: The lessons I think I bring to this are to use the moment of the crisis - this fiscal crisis, this hurricane crisis - use the political will in the moment to do the most that you can to change the structure of the economy. Political will peters out over time as things stabilize and as the problems become lesser, as some of the solutions start working. And so one of the lessons I bring to this is that you really need to do as much as you can as soon as you can because that's your greatest opportunity to move the economy forward long-term.
MARTIN: So that begs the question, what do you think you have accomplished so far?
JARESKO: I think moving the debt forward has been a very important part of what we've accomplished. On the fiscal side, I think it's two things. One, I think we've come to agreement with the government on a large number of both fiscal measures - meaning, how do we make government more efficient and more affordable - and structural reform measures, which are, what are the things we can do to become more competitive as an economy?
So, for example, the transformation of the electricity market - especially post-hurricane, there is common agreement here with the government, the legislature and the population that we need to do a transformation of the electricity sector, bring the price down and make it more reliable. The last thing I would point to is transparency. There's often been criticism of lack of data, poor financial data, inaccurate financial data from Puerto Rico, and we're making progress on making more data available to the public - everything from simple payroll and attendance in government to the bank accounts of the government. And so I think that is something that is visibly different than anything in the last decade.
MARTIN: Well, one thing that you have been transparent about is your compensation. It's an issue for many Puerto Ricans. It's been reported that your salary is upwards of half a million dollars a year. When we were at the island a couple of months ago, many people brought this up. They felt, well, gosh. That's a lot of money when a lot of people here are still struggling. And you're calling for austerity measures, including layoffs, and some people just can't square that. So I just feel an obligation to ask you, what do you think about that?
JARESKO: My board made me an offer and recruited me for the sets of skills that I bring to this position. So what I try to let people know is that my job is a temporary one. If we are successful, the board achieves its mandate, and we go away. And the better I do my job, the less it's going to cost the people of Puerto Rico.
MARTIN: And you moved to Puerto Rico for this.
MARTIN: Is it what you expected?
JARESKO: It's a beautiful place. I had never been here before I came into the interview process. And it's even more beautiful than I'd ever expected.
MARTIN: And the job itself - is it what you expected?
JARESKO: It's complex. It's - I never expected a hurricane. I never expected the repercussions, the devastation could be so incredibly difficult. But, at the same time, I saw a spirit in the people of Puerto Rico and a willingness to rebuild, a willingness to fight for their livelihoods, for their homes, for their culture, for their communities that is extraordinarily inspiring.
MARTIN: That is Natalie Jaresko, executive director of Puerto Rico's financial oversight and management board.
Natalie Jaresko, thank you so much for speaking with us.
JARESKO: Thank you.
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